Back to News
Investor Relations · Oct 23rd, 2025
QUARTERLY HIGHLIGHTS
- Net income was $42.30 million for the quarter, up $4.98 million or 13.34% from the previous quarter and up $7.36 million or 21.06% from the third quarter of 2024. Diluted net income per common share was $1.71, up $0.20 or 13.25% from the previous quarter and up $0.30 or 21.28% from the prior year’s third quarter of $1.41. These results include $1.88 million in pre-tax losses from the sale of approximately $73 million of available-for-sale securities executed in the third quarter as well as a $1.00 million charitable contribution to the 1st Source Foundation.
- Return on average assets increased to 1.86% from 1.67% in the previous quarter and 1.59% in the third quarter of 2024. Return on average common shareholders’ equity increased to 13.76% from 12.61% in the previous quarter and 12.87% in the third quarter of 2024.
- A cash dividend increase of two cents per share to $0.40 per common share for the quarter was approved, up 11.11% from the cash dividend declared a year ago.
- Average loans and leases grew $46.93 million in the third quarter, up 67% from the previous quarter and increased $409.71 million, up 6.20% from the third quarter of 2024.
- Average deposits increased $75.03 million in the third quarter, up 1.02% from the previous quarter and increased $289.69 million, up 4.06% from the third quarter of 2024.
- Tax-equivalent net interest income was $88.90 million, up $3.56 million or 4.17% from the previous quarter and up $13.27 million, or 17.55% from the third quarter a year ago. Tax-equivalent net interest margin was 4.09%, up eight basis points from the previous quarter and up 45 basis points from the third quarter of 2024.
- Provision for credit losses of $0.90 million was recorded during the quarter compared to $7.69 million in the previous quarter and $1.72 million during the previous year’s third quarter. The allowance for loan and lease losses as a percentage of total loans and leases remained consistent with historical levels, rising to 2.32% at September 30, 2025, up from 2.30% at June 30, 2025, and 2.30% at September 30, 2024.
South Bend, IN – 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported record quarterly net income of $42.30 million for the third quarter of 2025, up 13.34% compared to $37.32 million in the previous quarter and up 21.06% from the $34.94 million reported in the third quarter a year ago. Year-to-date 2025 net income was $117.14 million, up 15.76% compared to $101.19 million during the first nine months of 2024. Diluted net income per common share for the third quarter of 2025 was $1.71, up 13.25% compared to $1.51 in the previous quarter and up 21.28% versus $1.41 in the third quarter of 2024. Diluted net income per common share for the first nine months of 2025 was $4.74 compared to $4.09 a year earlier. The quarterly results were impacted by solid growth in net interest income and lower provision for credit losses offset by realized losses from strategic repositioning trades in the investment portfolio and higher noninterest expense.
At its October 2025 meeting, the Board of Directors approved an increase in the cash dividend of two cents per share, raising the approved dividend for the quarter to $0.40 per common share, up 11.11% from the cash dividend declared a year ago. The cash dividend is payable to shareholders of record on November 4, 2025, and will be paid on November 14, 2025.
Andrea G. Short, President and Chief Executive Officer, commented, “We are pleased that we achieved record quarterly net income during the third quarter and continued net interest margin expansion for the seventh consecutive quarter. Higher rates on increased average loan and lease balances, and lower short-term borrowing costs led to an eight basis point improvement in our margin from the prior quarter. The credit quality challenges we experienced during the second quarter improved moderately during the quarter and our nonperforming asset levels decreased. Nonperforming assets to loans and leases at September 30, 2025 was 0.91% down from 1.06% at June 30, 2025 while the allowance for loans and lease losses as a percentage of total loans and leases remained strong at 2.32% up slightly from 2.30% the previous quarter.
“Most importantly, our balance sheet remained resilient throughout the quarter, underscoring a solid financial foundation that has consistently supported our business over time. This strength is not new; it reflects a long-standing commitment to disciplined financial management and positions us well to navigate ongoing macroeconomic uncertainty affecting our customers and their industries. We maintained strong liquidity and upheld our historically conservative capital structure, reinforcing our ability to drive long-term value for shareholders.
“As part of a long-term, multi-year strategy for succession, Christopher J. Murphy III stepped down from his role of Chief Executive Officer of 1st Source Corporation effective October 1, 2025. He now serves as Executive Chairman of 1st Source Corporation and 1st Source Bank. After 50 years of successive leadership as President, Chairman, and Chief Executive Officer, the Bank and Corporation have benefitted greatly from his guidance and expertise. We are pleased that he will continue to serve as Executive Chairman to help position the company for a strong future.
“This change initiated several other role transitions. Kevin C. Murphy, previously Chief Digital Officer and Executive Vice President of 1st Source Corporation and 1st Source Bank, retained his role of Executive Vice President of the Corporation and became President of 1st Source Bank. Additionally, I am honored to have taken on the role of Chief Executive Officer of 1st Source Corporation while also retaining the title of President of 1st Source Corporation and Chief Executive Officer of 1st Source Bank. I look forward to this next stage as we continue to serve our clients and communities well.” Mrs. Short concluded.
Christopher J. Murphy III, Executive Chairman, added, “As Andrea reported, we have had a successful transition of senior leadership and I could not be more excited or optimistic about our future. Andrea has been a 1st Source colleague since 1998 and she has been preparing for this role since 2013. Also, we were very pleased to learn during the third quarter that 1st Source Bank was named to Bank Director Magazine’s Best U.S. Banks list coming in at #19 overall in the top 25 Banks and #8 in the category of $5 billion up to $50 billion in assets.
“Also, in keeping with our commitment to our community, we have remodeled our Elkhart West Banking Center in Indiana, and moved our banking center in Kalamazoo, Michigan to a new location. Both banking centers now feature the Bank’s side-by-side banking model. This experience invites the client behind the “teller line,” allowing for the Bank’s clients and bankers to have a more transparent and inclusive relationship.” Mr. Murphy concluded.